In a recent Platforum9 Session, Velimir Zivkovic, Associate Professor and Director of LLM programs at Warwick Law School, shared valuable insights on understanding English contract law. His expertise in teaching contract law to both undergraduates and international students provides a unique perspective on this globally significant legal system.
The Global Significance of English Contract Law
Zivkovic explained why English contract law remains widely used globally: “For a number of historical reasons, English contract law is widely applied globally in commercial contracts, many of which have nothing to do with England at all.”
Key factors contributing to its widespread use include:
- Historical spread through the British Empire
- Reputation for predictability and commercial orientation
- Dominance of Anglo-American law firms globally
- Strong ecosystem of legal expertise and institutions
Fundamental Differences from Civil Law Systems
One of the most significant challenges for lawyers from civil law jurisdictions is the absence of a comprehensive code. As Zivkovic noted: “If you don’t have experience with common law you’re going to be completely flabbergasted by the fact that there is no single code that you’re going to have a look at, which is going to answer your questions about how is this regulated.”
Key differences include:
- Reliance on case law rather than codified rules
- Need to understand and interpret precedents
- More detailed and lengthy contracts
- Different approaches to contract interpretation
Contract Drafting and Structure
English law contracts tend to be more detailed and comprehensive than their civil law counterparts. Zivkovic explained: “Contract lawyers in common law jurisdictions and in England are not that happy to wait for the court or anyone else or anything else to fill in the gaps. They want to fill those gaps themselves.”
This results in:
- Longer, more detailed contracts
- Extensive use of definitions
- Attempt to create a “closed ecosystem” within the contract
- Higher upfront costs in drafting
The Role of Terminology
Zivkovic emphasized the importance of understanding specific legal terminology: “There are a lot of terms which have their own meaning that you should really be aware of. And maybe the plain language is not particularly helpful there.”
He provided an example: “‘Time is of the essence’ – you might say it’s you’re imploring the other party to be diligent, right? But in contract law, this has a very long standing meaning that if time is of the essence, that any sort of delay with performance is basically a repudiatory breach.”
Certainty vs. Fairness
A key characteristic of English contract law is its emphasis on certainty over fairness. Zivkovic noted: “You might plead that something is unfair, that the contract has been drafted in an unfair way, and I would say that civil law jurisdictions give you more scope for arguing that something is unfair or that something is against good faith. English law generally doesn’t have much time for those arguments.”
Practical Applications
English law is particularly prevalent in certain sectors:
- Commodities contracts
- Shipping and maritime transport
- International commercial transactions
Zivkovic noted: “There are estimates that in particular sectors, English law is applied in around 70 percent of all contracts.”
Dispute Resolution and Enforcement
Key aspects of dispute resolution include:
- Efficiency of English commercial courts (typically under one year for resolution)
- High costs of litigation
- Strong enforcement mechanisms within England
- Integration with arbitration systems
Impact of AI on English Contract Law
Zivkovic identified two main areas where AI is affecting English contract law:
- Legal Framework: “The principles of contract law are flexible enough to grapple with AI issues as such.”
- Practice: “AI generative drafting and reviewing has been perhaps the most successful so far… AI is good in recognising that obviously it can do a very good contractual review very quickly, very efficiently.”
Differences from U.S. Contract Law
While both systems are common law based, significant differences exist:
- Multiple jurisdictions in the U.S. (50 states)
- Different approaches to principles like good faith
- Variations in damage calculations
- Need for specific expertise in U.S. law despite common law foundations
Conclusion
Understanding English contract law requires significant investment in learning its principles and peculiarities. While it offers predictability and certainty, it comes with complexity and costs. As Zivkovic noted, the system’s global reach and influence make it an important area of study for international lawyers, particularly those involved in commercial transactions.
The combination of historical precedent, practical efficiency, and global acceptance continues to make English contract law a dominant force in international commercial relationships, despite the challenges it presents to those trained in other legal systems.
